Indian benchmarks continue to trade in red in noon session

Indian bourses continued to trade in red in the noon session as investors remained on sidelines on UK election shock after European Central Bank maintained status quo as expected and testimony of James Comey was without fire. The exit polls showed that Prime Minister Theresa May's Conservative Party could fail to win a clear majority, a shock result that would plunge domestic politics into turmoil and delay Brexit talks. On the domestic front, sentiments remained subdued after a survey by the Reserve Bank of India showed that the economy will gradually consolidate growth in the current fiscal. The survey enlightened that real gross domestic product (GDP) and real gross value added (GVA) are expected to grow by 7.4% and 7.2%, respectively, in 2017-18 and consolidate further by 40 basis points (bps) and 50 bps, respectively in the following year. According to the forecasters, retail inflation is expected to gradually rise to 5 per cent by the fourth quarter of 2017-18. However, losses remained capped with UN trade report that despite stagnant foreign direct investment (FDI) inflow of $ 44 billion in 2016, India will most likely remain most favoured destination due to its attractiveness among MNCs for cross-border mergers and acquisitions. Besides, India Met Department (IMD) has said that a low-pressure area would form in the Bay of Bengal in the next two days, boosting prospects of accelerated progress of the monsoon.

On the global front, Asian markets were trading mostly higher on Friday, shrugging off incoming results of UK general elections that showed a hung parliament and uncertainty over the nation's Brexit negotiations with the European Union as a distinct possibility. The pound tumbled 1.5% against the dollar in Asian trading hours, set for its worst session of 2017. Further, Japan's Nikkei soared as index-heavyweight SoftBank leapt 7% after its unit agreed to buy a robotics firm.

Back home, stocks from Realty, Consumer Disc and Auto counters were supporting the markets’ uptrend, while those from IT, FMCG and Teck counters were adding to the underlying cautious undertone. In scrip specific development, Ujaas Energy gained after the company received order from Hindustan Aeronautics for design, engineering, manufacturing/procurement, supply, construction, erection, testing and commissioning of 15 MW (AC) ground Mounted Solar Power Plant at HAL Ojhar Township, Nashik district in state of Maharashtra. Furthermore, Srei Infrastructure Finance surged after the company signed a Memorandum of Understanding (MoU) with Vnesheconombank to create a $200 million IT and Innovation Fund.

The market breadth remained optimistic, as there were 1180 shares on the gaining side against 1129 shares on the losing side, while 145 shares remained unchanged.

The BSE Sensex is currently trading at 31153.88, down by 59.48 points or 0.19% after trading in a range of 31087.28 and 31200.59. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.11%, while Small cap index up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 0.96%, Consumer Disc up by 0.42%, Auto up by 0.31%, Healthcare up by 0.26% and Telecom up by 0.23%, while IT down by 0.85%, FMCG down by 0.82%, TECK down by 0.64%, Oil & Gas down by 0.33% and Capital Goods down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.83%, Reliance Industries up by 0.83%, Mahindra & Mahindra up by 0.61%, Power Grid up by 0.56% and HDFC Bank up by 0.41%. On the flip side, Infosys down by 1.76%, ITC down by 1.73%, GAIL India down by 1.47%, Wipro down by 1.33% and ONGC down by 1.20% were the top losers.

Meanwhile, Reserve Bank of India’s (RBI) latest survey of professional forecasters on macroeconomic indicators, has reported that the Indian economy will gradually consolidate growth in the financial year 2017-18. It also reported that real gross domestic product (GDP) and real gross value added (GVA) are expected to increase by 7.4 percent and 7.2 percent, respectively, in the current fiscal and consolidate further by 40 basis points (bps) and 50 bps, respectively in the next fiscal.

According to the survey, CPI inflation is expected to slowly rise to 5 percent by the fourth quarter of 2017-18, with core inflation (i.e., excluding food & beverages, pan, tobacco and intoxicants and fuel and light) expected to remain sticky at around 4.8 per cent and it reported that the retail inflation stood at 2.99 percent in April. It also reported that WPI inflation is expected to rise moderately till December before declining to 3.0 per cent in the fourth quarter of 2017-18.

On the external front, the survey reported that foreign trade is expected to shed recent sluggishness as there is a greater optimism around growth of both exports and imports than in previous rounds of surveys, which is expected to sustain in 2018-19. It also expects the current account deficit (CAD) to rise in 2017-18 to 1.3 percent of GDP and further to 1.5 percent 2018-19.

The CNX Nifty is currently trading at 9628.80, down by 18.45 points or 0.19% after trading in a range of 9608.15 and 9644.10. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.64%, Indiabulls Housing up by 0.97%, Vedanta up by 0.90%, Yes Bank up by 0.71% and Mahindra & Mahindra up by 0.67%. On the flip side, Tech Mahindra down by 2.52%, ITC down by 1.78%, Infosys down by 1.76%, ONGC down by 1.44% and Wipro down by 1.36% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite gained 0.07%, FTSE Bursa Malaysia KLCI increased 0.2%, KOSPI Index added 0.7% and Nikkei 225 was up by 0.48%. On the flip side, Hang Seng decreased 0.37%, Jakarta Composite shed 0.24% and Taiwan Weighted was down by 0.26%.